NZX, which operates New Zealand's stock market, plans to start offering equity options trading in three stocks as it seeks to develop the nation's capital markets.
The Wellington-based company will launch option contracts in building products company Fletcher Building, telecommunications company Spark, and auction web site Trade Me Group on April 24, with plans to offer options on more stocks in the future, it said in a statement. Fletcher is the largest New Zealand company on the bourse with a market capitalisation of $6 billion, Spark, previously called Telecom, is the second largest with a market value of $5.49 billion, while Trade Me ranks 22nd with a value of $1.5 billion.
"The development of an equity derivatives market is of significant importance to ensure the long term viability and success of New Zealand's capital markets, offering a vital risk management tool for institutional and retail investors alike," said NZX chief executive Tim Bennett.
An option contract gives the buyer the right, but not the obligation, to either buy or sell 100 ordinary shares in the underlying company.
The equity options market will be supported by First NZ Capital Securities providing trading and execution services, and BNP Paribas Securities Services providing clearing services.